Opinionista Irvin Jim 24 April 2016

Workers’ demands for a living wage are reasonable

Workers are bargaining for higher wages within a difficult context in South Africa this year. This point was made repeatedly at the National Union of Metalworkers of South Africa’s National Bargaining Conference held from 22-24 April 2016 in Johannesburg, under the theme “End the Economy for the 1%, Secure our Jobs on a Living Wage!”.

Given the country’s poor economic outlook, employers are hardening their positions, citing the recession and South Africa’s looming junk status to dampen workers’ expectations for better wages and working conditions. But Numsa members are undeterred. Ours is a revolutionary union that will be celebrating its 30th birthday this year. We are South Africa’s biggest trade union and are among the top three fastest growing unions in the country.

Our stature as South Africa’s biggest trade union and continued expansion after three decades is evidence of our relevance not just in a challenging economic and political climate, but also in a persistently changing work environment.

The issues that affect our members will be familiar to you. Numsa members, like breadwinners all over the world, are doing their best to provide for their families, while campaigning for workplaces that treat people with respect. Our members want to live and work with dignity and have a sense of security for themselves and their children. For us this means that it is not just wages that must increase, but working conditions that must improve too.

Time and again at our bargaining conference, Numsa members highlighted the challenges of meeting their monthly expenses. With food prices sky-rocketing this year, decent salary increases are going to be important for families to avoid reducing vital nutritional intake and worse, to ward off hunger. The year-on-year increase on the food basket from January 2015 to January 2016 was 14.6%. Similarly the year-on-year increase in the price of electricity in February 2016 was 12.6%.

Our members also highlighted healthcare and housing as special areas for attention. Numsa members fall into the unfortunate category that many black families in South Africa find themselves in – the so-called “missing middle”.

South Africans would have heard about the stresses facing “missing middle” families when large numbers of predominantly black students at our universities embarked on the #FeesMustFall campaign. These students come from families that typify the average Numsa member’s circumstances. These are working and middle-class families that earn too much to qualify for government support, but too little to qualify for financial loans from private banks (also highlighting the need for public banks, which is something that Numsa seeks to pursue in the long term).

Many of our members emphasised the significance of receiving better medical aid benefits from employers. As such Numsa members demand that employers cover up to 80% of their medical aid costs while members pay for the remaining 20%. Members also felt strongly that employers must provide housing allowances, as many don’t qualify for mortgage finance. Numsa members demand a housing allowance of R5,000.

These are not unreasonable demands.

Of course, the most important issue for workers is wages. This is true for our members too. In this regard, Numsa members demand a living wage. This year we are calling for 20% wage increases across the board.

For too long we have been told that raising wages will lead to layoffs. This is a myth. For every conservative think tank study that makes this case, an alternative study states otherwise. In fact, the evidence that raising wages does not lead to job losses is so strong that in 2014, 600 US economists, including seven Nobel laureates, wrote a letter to President Obama arguing the following:

In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labour market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”

In the South African context, given our history of wage suppression for black workers (which continues today), we remain the most unequal country in the world with a clear racial fault line. Sixty-five percent of the South African economy is owned by just 10% of the population. A staggering 80% of the owners of our economy are white.

South Africa’s CEOs earn obscene amounts of money. The vast majority are white. In fact, the top 10 highest earning CEOs in South Africa are all white. At the top of the list is Alan Clark of SAB Miller who earns R152-million per annum. Johan Rupert is at the bottom end of this top 10 list, earning R49.4-million. One wonders what Clark is doing in his office on a day-to-day basis that he needs to be rewarded R152-million for his efforts?

This ridiculous situation highlights the importance of using wages and salaries as redistributive instruments to address South Africa’s unjust legacy of inequality.

South Africa’s crisis of inequality is further highlighted by the recent release of the Panama Papers, which exposes how the rich hide their wealth. Apart from the obvious fact that the rich have too much money, the Panama Papers exposé also reveals that they are cheating us further by not paying their fair share of taxes.

One of the most compelling arguments for significantly increasing the wages of workers is that they don’t hide their money in Swiss bank accounts or exotic island tax havens. Workers spend their money in the local economy. This invigorates productive sectors of the economy and further stimulates job creation.

For too long working people who simply don’t earn enough have carried the South African economy. Numsa will address this situation with focus and determination. We are determined to win the struggle for racial and economic equality in South Africa. At the forefront of this struggle is leading the charge for decent living wages for all South Africans. DM

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